One time Duterte should listen to the outside world

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PRESIDENT Rodrigo Duterte has taken a certain pride in not being influenced by the opinions of foreign officials or media, but on Friday, two important analysts – Moody’s Investors Service and the Nomura Group – issued some dire-sounding warnings that he would be well advised to heed.

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The two firms assessed the potential implications for Asian countries of the possible outcomes of the US election to be held in November, in which either the Democratic candidate Hillary Clinton or the Republican Donald Trump will be elected President. Moody’s and Nomura were circumspect in their comments to avoid favoring one or the other, but clearly raised higher alarm in case a Trump presidency is put in place, predicting that in general, his anti-immigration, nationalist stance would harm the emerging economies from this part of the world.

It is important to realize, however, that it is not a black-and-white difference. A Clinton presidency may also have negative implications, although they are much clearer in the case Trump is elected. Although Clinton contrasts Trump in her views on immigration, she has differed with President Obama on things like the Trans-Pacific Partnership (TPP) trade pact, which the Philippines hopes to be invited to join sometime in the near future, but whose future is now in doubt no matter who wins the US election.

As some American political analysts pointed out recently, the unexpected popularity of Trump, even if he loses, may mean that Clinton will have to adopt some more populist ideas to appeal, not to voters, but the members of the US Congress whom voters who share Trump’s views may elect. And that is likely to mean some tightening of immigration policies, and discouraging companies from the practice of offshoring, two things that have a direct and significant impact on the Philippines.

Moody’s pointed out that remittances from Filipino workers in the US account for about 3.3 percent of our gross domestic product, or GDP, which is the widely used measurement of a country’s economic performance. Nomura added that the US hosts about 34.5 percent of the total overseas Filipino population, and is responsible for about 31 percent of all remittances. A tightening of immigration, or moves to limit or discourage the hiring of foreign workers by businesses in the US, is bound to lead to a decline in those remittances.

Likewise, any trend that reduces US companies’ appetite for offshore business locations will hurt the Philippine economy, perhaps even more so than a reduction in remittances, because an expected rise in business process outsourcing (BPO) revenues within the next few years has been factored in to the country’s economic performance in the medium term.

Both Moody’s and Nomura pointed out that the Philippines has a strong economic foundation, including a healthy current account and ample foreign reserves, and those should help to cushion any shocks from the change in US policy – whatever it may be – after the election. That much is comforting, but those assets are finite; the real message to the Duterte government is that reliance on the US for a sizable contribution to the economy may very soon be a very bad idea, and that domestic development should be a priority.

This is a message that the Duterte administration should listen to; while his ambition to establish an independent course for the country is praiseworthy in some ways, he should not entirely ignore what others have to say; sometimes, as in the case of Moody’s and Nomura’s assessments, they are actually trying to help.

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6 Comments

  1. Why, are the foreign investors tripping over one another in their rush to invest here? Even during the time of P. Aquino, who was the darling of these rating companies, we got the least FDIs. This warning only favors the yellows who are scared that their wealth will depreciate. Let them shout to the world. We don’t care.

  2. Mariano Patalinjug on

    Yonkers, New York
    26 September 2016

    The perceptive Time magazine just the other day lamented that “Night has fallen on the Philippines”–and this could be a very long dark night lasting six years under a “renegade” Little Tyrant Rodrigo Duterte.

    Der Fuhrer Duterte is proving to be clueless or sophomoric as far as foreign relations and geostrategic issues are concerned, mainly because his experience is circumscribed by his very limited tenure as Mayor of Davao City where he acted unopposed or uncriticized as a Little Tyrant.

    Judging by his recent pronouncecements, let’s face it: Rodrigo Duterte is ANTI-AMERICAN and PRO-CHINESE.

    The context of his veering away from the US and his embrace of China is when Chinese President XI JINPING lavishly praised him as “a great president.” Falling heedlessly for the gambit, Mr. Duterte, responding in kind, also praised Mr. XI to high heavens as “a great president.”

    Since then, Mr. Duterte,obviously to spite the United States, has declared that he wants US military forces to get out of the island of Mindanao. Furthermore, he recently declared that he will be buying weapons from China and Russia which the Philippines needs badly for its DEFENSE MODERNIIZATION PROGRAM.

    Soon he will be making a State Visit to China, on the kind invitation of his newly-found bosom friend XI JINPING. Expect him to be treated like an Emperor and not just the two-bit Little Tyrant of a President that he is. After this, as a matter of course, you can expect Der Fuhrer Duterte to honor his friend XI JINPING with an invitation to a State Visit to the Philippines. [He will never savage his friend Mr. Xi by calling him a “son of a whore!”–which was the careless way he savaged President Barack Obama.]

    MARIANO PATALINJUG
    patalinjugmar@gmail.com

  3. No matter who wins in US elections, Philippines will not care about what is their fallout to the country. It is them on the losing end if they threaten and tell the country that “If not for us Your Place will be like this and like that” Stop telling us as if we cannot survive without US. We are not a country of BEGGARS & PAUPERS that anything you say will be a law that we must obey. Good neighborliness comes from RESPECT to it’s dwellers. And mind you, don’t interfere to our DOMESTIC affairs. US is afraid that if US loses their influence to the Philippines, their country’s foremost interest in this part of the world will suffer. It is a FACT. By hook or by crook US must enforce and retain this country under their belt because losing so will mean losing US credibility and influence.

  4. So what? The Philippines has been with the US since I can remember and I’m 71, I can’t remember any progress/development for the country. Please don’t make threats, it is bad taste.

    • Agreed and I am 58…these USA Corp only took advantage of the BOI and EPZA tax holidays and which during the holidays were on effect, these USA Corp repatriated their investments from un-taxed profits to SAM in Cash and in forms ( CEO and top Mgnt bloated salaries, perks, travel, input plus purchases from offshore affiliates, interest on loans taken from USA banks, technical and consultancy fees from USA firms and the likes…) and by the time the tax holiday expires these USA Corp are closing shop. Intel, Ford, Mattel are such examples…ginigisa tayo sa sariling mantika. Why these USA Corp came here because of our skilled and professional but low paid labors and management staffs. Let them go somewhere where they cannot find labors and staffs that can correctly spell “stomach ache” as in SAM you make my stomach ache……..

  5. listen and then what? I’m sure he does, if not personally, then members of his staff. he can listen till his ears bleed. he cannot campaign for one or the other. the best he can do is prepare. besides, all this gloom and doom about trump may be part of everything the “establishment” is doing to keep them in power.